Wednesday, July 22

Getting Smarter Driving for Uber, but Productive Miles are Low

I continue to drive for Uber, mostly because I went all-in by purchasing another car and am now stuck with it.  It will be interesting to see whether I earn any real income doing this, or if my pay is simply a cashing-out on the depreciation for my car.  If my driving really costs what the IRS says, then I absolutely will NOT report any income from driving for Uber.

The problem with Uber is the unpaid miles between trips.  It's not that I am driving around aimlessly.  Usually I will drop off a passenger and immediately find a shady area to park the car.  The majority of the unpaid miles are incurred after I have accepted a "ping" and am driving to my passenger's pickup spot.  For example, in the late afternoons in Pinellas County there are fewer Uber drivers on the roads, which means I have more requests from further away.  I've been taking a break in the afternoons and turning the app back on between 3-5 PM.  Today, my first pickup was at Largo Mall, 5 miles from my house.  The passengers were going to their home two miles away.  I drove 7 miles, but was only paid for 2.  As I was leaving, another passenger requested a ride.  She was 4 miles away.  Her destination:  .63 miles away.  I received the $4 minimum fare, which was only $2.40 after Uber took its cut.  Basically a 5 mile drive for $2.40.  My next fare was 6 miles away, and after driving halfway in rush-hour traffic, the rider canceled the request.  Since I live in the most densely populated county in the third highest populated state in the U.S., I have to believe my situation is reflective of Uber drivers everywhere.

Now I have to decide whether I should curtail my hours to peak periods only.  For a few hours each morning, and most of the day Friday and Saturday, I receive continuous ride requests and can maximize my paid miles.  If I really am losing money with these unpaid miles, I will have to focus only on periods of high demand.

Friday, July 17

Should I tip my Uber Driver?

One of the common misconceptions about Uber is that somehow the tip is included in the fare.  This simply is not the case.  The truth of the matter is, most Uber drivers are earning below minimum wage.  Even more, tips sometimes make the difference between being paid for a trip or the driver coming out of pocket to cover his overhead for that ride.  Ask yourself this:  would it ever be appropriate to tip a taxi driver?  What about a hotel bellman, or a valet?  Do you tip your server at a restaurant?  What if that person was working just for tips, and received no other income?  In the case of Uber, sometimes that is the case.

The common thread with these roles is that tipping is customary, particularly when service meets or exceeds your expectations.  Uber DOES NOT include a tip in your fare, and there is no way to add one using the app.  The only way your Uber driver will receive a tip is if you offer him one.

It is important to understand how an Uber driver earns his pay.  In Tampa Bay, someone using Uber pays the following fare:

  • $1 Safe Rider Fee - this is for background checking your driver and commercial insurance (the Uber driver is also responsible for insuring his vehicle).  The driver gets none of this.
  • $.95 per mile (the driver receives $.76/mile after Uber's commission).
  • $.13 per minute (the driver receives $.10/minute after Uber's commission).
Uber drivers are only paid when a passenger is in the vehicle.  If I receive a request that is 4 miles away, I am not paid for my mileage or my time driving to your pick-up spot.  If I am dropping you off in a place where there is minimal demand for a ride, I also have to reposition my vehicle to somewhere with more demand.  The time I spend waiting for my next fare is completely unpaid.

If I always had another passenger waiting to be picked up after dropping one off, and that passenger was close by, the fees Uber pays would be reasonable.  That rarely occurs.

What often happens is that I will get an early morning request for the airport.  It's important to understand that I do not know where you are going until I pick you up - Uber hides that from me - so I can't cherry pick the rides I wish to provide.  I probably have driven 5 miles/10 minutes to pick you up.  After dropping you off at the airport, you might assume I am picking someone else up.  Unfortunately, flights aren't arriving at 5:00 in the morning.  Even if there is a pickup, it is a crapshoot whether that passenger is headed to my area (the beach - an unusual destination for morning arrivals) or maybe to downtown Tampa, which is in the opposite direction.

Now that I have a full week of driving to analyze, I can report that fewer than half the miles I drive are paid miles.  While I should be able to improve my productivity over time, it is unlikely I will ever do better than 60-65% of total miles being on the clock.  When I am only earning $.76 per paid mile, having 50% of my driving miles go unpaid means my income isn't covering what the IRS says my vehicle is costing me.

Bottom line:  Don't stiff your Uber driver unless they suck.  Give them a tip.  We make so little that your tip could be the only pay we receive for giving you a ride.  Also, rate your driver a "5" unless you want them to lose their job.  Even though driver ratings are on a 5 point scale, Uber considers any score below 4.6 grounds for termination.

Thursday, July 16

Uber Passengers Can be Annoying

Even though I'm still excited by how easy it is to earn money with Uber, the downsides to being an Uber driver are becoming more obvious now that the honeymoon phase has passed.  It has been a full week since I started driving for Uber, and here are some examples of annoying passenger behavior:
  • Many of my passengers are drunk.  Though the experience varies from one fare to another, the greatest challenge with drunk passengers is when they distract me.  They tend to be chatty, loud, and some of them touch me.   I don't like it when a stranger rubs my shoulders or rests their head on my side.  It is weird.  And just because I am agreeing with whatever you say, don't ask me to shake your hand while I'm driving!
  • People say things in front of me about their private lives.  They tell me about their arrest record, their drug use, and their sexual escapades.  I really am a nerd, because I crave more intelligent conversation than this.
  • I picked up an escort who wore nothing but a skimpy bikini.  She spent most of the ride arranging a transaction with her drug dealer.  Must be an expensive habit because she needed $200 worth of whatever he was bringing her.
  • A group of teens and 20-somethings decided they were going to smoke a cigarette in my backseat, after I told them not to.  I guess they figured with the windows down and the girl in front distracting me that I wouldn't notice the smell.  Guess what?  The passenger after you doesn't want to smell your cigarettes.  The entire trip they debated whether they should roll on molly, get faded on acid, or just get drunk.  At least I'm learning the slang these young folks are using these days.
  • Waiting time is time lost.  In Tampa Bay, Uber pays mileage plus time.  Time is paid at $.13 per minute, less Uber's 20% commission.  That means I make $.10/minute waiting on my passenger.  Six dollars an hour is less than minimum wage.  Many of my passengers have needed to make stops.  A couple minutes is not a problem, but having me wait 15 minutes while you get dressed means I am losing out on more lucrative work.
  • This last example is location specific: sand.  Since I am spending much of my time picking up passengers on Clearwater Beach, I am also picking up their sand.  I'm going to have to vacuum out my car almost daily.
  • Very few people tip.  The later into the night it gets, the fewer the tips.  My best tips have come from daytime passengers, and most of those have been short trips.  Few of my longer fares (say, from the beach to Tampa) have tipped.
What I am learning is that the best passengers are my daytime pickups.  People on their way to work are usually sober and respectful of my car.  My favorite rides are the ones where I am tipped, since only then do I make a reasonable income.  I don't mind driving a group of tourists half a mile if they give me a $5 tip, because I'm going to get another fare as soon as I drop them off.  Sometimes the passengers with the shortest trips feel bad though and will tip me for the trouble.

Wednesday, July 15

All Those Gas Station Mystery Shops Make Sense Now

Last week I had nearly 80 gallons of gas stored in the shed.  It feels so good to use it up, and the free gas has kept my driving costs down.  This is one way I will make driving for Uber just a little more profitable.  Unfortunately, I just ran out of reserves and will have to start paying for gas once again.  At the end of this month I have enough shops lined up to fill up my tank twice, so I do have that to look forward to.

Mystery shopping has taken a backseat to Uber, but that's fine by me.  I needed a break.  Besides, the biggest advantage I see with Uber versus mystery shopping is that the job comes to me.  With mystery shopping, I have to search several job boards looking for work.  Then I have to prepare for the job, whether that be reviewing guidelines, printing paperwork, or creating cheat sheets on my phone.  Plus there is all the reporting done afterwards, including uploading photos and writing narratives.  With Uber, if I want to work, all I do is turn on the app and wait for a ping.  When I am done for the day, there's nothing left to do but review my pay statement and update my mileage log.

Our cabinets are being delivered today, and we are itching to get the kitchen back together.  We still won't have countertops.  That is a custom job that I am hiring out and the installers won't take the measurements until I have the cabinets in place.

Next Friday I have an overnight security job through one of my hospitality companies.  Then on Sunday we begin a 3 day meeting in Orlando.  On our return, I have those gas station shops to complete, then we fly to Virginia the following Friday to shop a timeshare.  We'll be gone a week, so it should feel like a real vacation (the shop won't take but 2-3 hours of my time).

I'm in a happy spot right now.  I'm glad I found Uber, even if the pay is less than I thought it would be.